One variation or another

A big topic in the medicine world is whether the variation in how care is delivered, particularly near the end of life, is symptomatic of overuse, underuse, misuse, and waste in the health care system. The Dartmouth Atlas Project, run by the Center for the Evaluative Clinical Sciences at Dartmouth Medical School, spends its time on the question of how medical resources are distributed and used in the United States. Here's the premise:

The project offers comprehensive information and analysis about national, regional, and local markets, as well as individual hospitals and their affiliated physicians, in order to provide a basis for improving health and health systems. Through this analysis, the project has demonstrated glaring variations in how health care is delivered across the United States.

Now, as someone trained in statistics, I get a little nervous when someone in academia talks about "glaring variations". It might suggest a degree of hyperbole that is not consistent with rigorous analysis. But upon further review, it is hard to find fault.

One study, for example, showed a six fold variation in per capita hospital spending on people with chronic illnesses who died between 1999 and 2003 in hospitals across the country. The spending was not correlated with the rates of illness, but seems instead reflect "how intensively certain resources -- acute care hospital beds, specialist physician visits, tests and other services -- were used in the management of people who were very ill but could not be cured." The authors' conclusion is that the Medicare system gives inappropriate financial incentives to take care of chronic care patients in a hospital setting, where overly expensive end-of-life care will be delivered. In essence, this suggests that we use too many specialists and high-priced equipment, tests, and other services for people who should really be taken care of in another setting.

This study points out the wide variation in cost of care for these end-of-life patients, and then it also points out that the hospitals that treat patients more intensively and spend more Medicare dollars did not get better results. In a variant on "if you build it, they will come", the report concludes:

The study paints a picture of the health care system in disarray over the treatment of chronic illness. There are no recognized evidence-based guidelines for when to hospitalize, admit to intensive care, refer to medical specialists or, for most conditions, when to order diagnostic or imaging tests, for patients at given stages of a chronic illness. Lacking this, two factors drive decisions:

Both doctors and patients generally believe that more services - that is, using every available resource such as specialists, hospital and ICU beds, diagnostic tests and imaging etc. - produces better outcomes.

Based on this assumption, the supply of resources - not the incidence of illness - drives utilization of the services. In effect, the supply of hospital beds, ICU beds, and specialty physicians creates its own demand, so areas with more resources per capita have higher costs per capita.

These conclusions are not universally accepted. While they acknowledge that some variation is the result of available resources, some observers feel that the variation in these costs is explained by other factors not captured in the folks at Dartmouth. Matthew Holt provides a nice summary of these arguments and commentary on them here and there are lots of thoughtful responses here.

I come to this whole issue very late and after other people have dissected it to death. I'm not sure I have much to offer. Let's assume that the Dartmouth conclusions are correct and that much of the variation in health care costs is supply-driven. As a person involved in policy-making in other arenas, I am left wondering what one would actually do with this information if you could "pass a law". If you were in the government, would you act to apportion hospital and physician resources across the country? Highly doubtful. Would you change the method of reimbursement so that there would be a capitated payment for each type of chronic illness? I feels like that has been tried, and the public objected to someone -- anyone -- being the gatekeeper for how their care would be managed. Would you create a national standard on what services could be provided at the end of life, i.e., ration care? Politicians who have suggested that do not get elected. Could we adjust Medicare payments so that they provide ample payment for less acute care versus specialty care? That seems like a worthy goal for lots of reasons, but it is unclear to me how much it would do much on this front.

Please understand that I am not arguing against efforts to reduce overuse, misuse, underuse, or waste in any given hospital. I strongly favor that. I am just left wondering what I would do as a policymaker with this information. In the absence of other actions, I would, however, shine sunlight on these variations. Peer pressure and public exposure might be the best medicine.

Further, if I were a regional insurer I would start by publicly posting this kind of Medicare data to compare individual hospitals within my region with one another. In so doing, I would attempt to create pressure on my local institutions from the people (i.e., employers) who pay for most of the costs of health care. (Unfortunately, you can't post your own insurance company's cost data because it would demonstrate the unwarranted differences in reimbursement rates you pay to each of your region's providers!)

Are there other ideas from my thoughtful readers out there?